Visa (NYSE:V) announced on Tuesday that it is expanding its digital currency experiment to include new partners such as Worldpay and Solana. This move builds upon an initiative that the company began in 2021 with Ethereum and Crypto.com. The announcement resulted in a significant surge in Solana's native token, which increased by over 5% to $20.50 according to Coin Metrics.
The card network company, Visa, stated that it has already utilized the Solana blockchain, along with its previous partner Ethereum, to settle millions of USD Coins in fiat currencies through its VisaNet cross-border system. Visa's aim is to modernize cross-border payments by exploring digital currencies, thereby making these transactions faster and more affordable.
Visa's Crypto Head Cuy Sheffield said in the release, “By leveraging stablecoins like USDC and global blockchain networks like Solana and Ethereum, we're helping to improve the speed of cross-border settlement and providing a modern option for our clients to easily send or receive funds from Visa's treasury.”
Despite regulatory scrutiny from the Securities and Exchange Commission (SEC), which had previously cooled interest in cryptocurrencies, Visa's new partnerships suggest that the payments world still sees potential with blockchain technology, particularly for cross-border payments and commerce.
Visa is partnering with major merchant acquirers Worldpay and Nuvei (TSX:NVEI), aiming to attract merchants from various industries to its channels for processing digital payments. The company specifically mentioned on-ramp crypto providers, gaming operators, and NFT marketplaces as potential beneficiaries of transacting in stablecoins for their card payments.
In addition to working with Circle, a co-founder of Centre Consortium along with Coinbase (NASDAQ:COIN) in 2018, Visa uses its own Circle account to settle payouts in USDC to Worldpay and Nuvei. These companies then route the merchants. Visa is also collaborating with multiple card issuers for its work in the stablecoin arena.
Worldpay President Jim Johnson commented on this development saying, “Visa's USDC settlement capability enables Worldpay to bring more of our treasury operations in-house and allows us to offer merchants more choices for receiving funds,” He added that diversifying funding options and increasing flexibility is crucial for meeting the evolving needs of global merchants.
Solana was chosen by Visa due to its capacity for sending and receiving stablecoins at higher speed and lower costs. With the addition of Solana, Visa becomes one of the first major payments players to use Solana for live settlement.
This development follows the launch of PayPal (NASDAQ:PYPL)'s company-branded stablecoin, PayPal USD. The function of PayPal USD is to reduce friction for in-experience payments in virtual settings and facilitate direct flows to developers. Bernstein has identified stablecoins as a nearly $3 trillion market over the next five years.
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